Amendments to the 2006-2008 Biennial Budget Passed
by the 2007 General Assembly

Section 22.1-93, Code
of Virginia, requires the Department of Education to provide ...estimates
to be used for budgetary purposes relative to the Basic School Aid Formula...
following the conclusion of the General Assembly session based upon the budget
actions taken by the General Assembly with respect to public education.The revenue estimates provided in this
memorandum represent the state funding that is projected to be distributed to
school divisions in fiscal years 2007 and 2008 based on amendments to the
2006-2008 biennial budget adopted by the 2007 General Assembly on February 24,
2007.The adopted changes affect fiscal
years 2007 and 2008.Fiscal year 2007 began on July 1, 2006,
and ends on June 30, 2007.Fiscal year
2008 begins on July 1, 2007, and ends on June 30, 2008.

The
2007 General Assembly adopted changes to the amended 2006-2008 biennial budget
as introduced by Governor Kaine in HB 1650/SB 750 (reference Informational
Superintendents Memorandum No. 262, dated December 15, 2006).The attachments to this memorandum provide
information on the changes to the Governors introduced budget for the
2006-2008 biennium that were adopted by the General Assembly.Unless changes are specifically noted in the
attachments, Governor Kaines proposals contained in the introduced version of
HB 1650/SB 750 were adopted as outlined in Informational Superintendents
Memorandum No. 262.Please note that the
amended 2006-2008 budget adopted by the General Assembly and the projected
state funding for each school division contained in Attachment B to this memorandum
are based on the departments latest projections of March 31 average daily
membership (ADM) for those accounts that use ADM to determine the amount of
funding.

The attachments to this memorandum include:

Attachment
A A summary of changes, adopted by the 2007 General Assembly, to the
amended 2006-2008 budget as introduced by Governor Kaine in HB1650/SB
750.These changes
are noted as "Final General Assembly Action" and are highlighted
in bold italic text.For reference
purposes, this attachment also repeats the information presented in Informational
Superintendents Memorandum No. 262, dated December 15, 2006,
that described the changes initially proposed by Governor Kaine in HB 1650/SB 750
and in Informational
Superintendents Memorandum No. 39, dated
February 9, 2007, that described the respective changes proposed by the
House of Delegates and by the Senate.

Attachment B A report in .pdf
format showing projected state funding and projected required local
matches for each school division for fiscal years 2007 and 2008 for the
Standards of Quality (SOQ), incentive, categorical, and school facilities
accounts based on the amended 2006-2008 budget adopted by the
General Assembly.The projected state funding and
projected required local matches are based on the Department of
Educations latest projections of March 31 average daily membership (ADM)
for each year for accounts funded on the basis of ADM.The projected state funding shown in Attachment B does not include
the supplemental grants authorized by the General Assembly that are unique
to certain school divisions.

Attachment C Instructions for
downloading the Excel calculation file from the departments website.

Several of the
incentive and categorical program accounts shown in Attachment B (Group III and
IV accounts) are funded on a reimbursement basis and represent the departments
latest projections of those reimbursements; however, final payments on these accounts in
fiscal years 2007 and 2008 will be based on actual qualifying expenses
submitted by school divisions to the department for reimbursement.Because Attachment B shows projected funding
for each school division (based on the departments projected March 31 ADM
only) in .pdf format, the entitlements cannot be changed to test the impact of
different ADM assumptions.If you wish
to see the effects of a different ADM projection on funding for your school
division in those accounts where funding is based on ADM, please use the Excel
calculation file described in the next paragraph.

In addition to the funding information
contained in Attachment B, a downloadable Excel file has been created to assist
school divisions in calculating projected state funding and projected required
local matches for fiscal years 2007 and 2008 for most Direct Aid programs based
on the amended 2006-2008 budget adopted by the 2007 General Assembly.This file gives divisions the opportunity to
change projected March 31 ADM to test the effect on projected state funding and
projected local match requirements using the departments projected ADM or a
local projection of ADM for those accounts funded on the basis of ADM.(Attachment B contains projected state
funding and required local match information for each school division in .pdf format based on the departments projected ADM only and
cannot be modified.)Although we have
confidence in the accuracy of our ADM projections on a statewide basis,
experience has shown that the accuracy of our projections for individual
divisions may vary.When divisions
believe that they have more accurate projections of their March 31 ADM, they
are encouraged to substitute their estimates for those provided in this
memorandum when using the Excel calculation file to project state funding and
required local matches.

Changing the projected March 31 ADM in the Excel
file only changes the estimated funding for accounts that are funded on the
basis of ADM, excluding the school construction grants program payments that
are funded based on ADM from the prior year.The estimated funding for all other accounts is
unaffected by changing ADM in this file and, therefore, remains the same.The fiscal year 2007 entitlements will not be
finalized until they are recomputed using actual March 31, 2007, ADM and other
final program participation information.The
final fiscal year 2007 entitlements based on actual data will be communicated
to you by a separate superintendents memorandum later this year.Actual fiscal year 2008
entitlements will not be finalized until after a similar process is followed
next year.

Also note that sales tax estimates in the Excel
calculation files are revenue projections only.Actual sales tax payments made to school divisions in fiscal years 2007
and 2008 on a semi-monthly basis will be based on actual sales tax
receipts.Pursuant to the appropriation
act, the Basic Aid entitlement calculation is based on the estimated sales tax
appropriation only and is not adjusted for actual sales tax revenues received
during the year.

The
budget bill containing the amended 2006-2008 biennial budget passed by the 2007
General Assembly (HB 1650/SB 750 as enrolled) now goes to Governor Kaine for action.The Governor will have several options that
include: signing the budget bill as presented to him with no changes, returning
the budget bill to the General Assembly with vetoes, returning the budget bill
to the General Assembly with amendments, or returning the budget bill to the
General Assembly with some combination of vetoes and amendments.

After the
Governor completes his actions on the budget, a reconvened veto session will
occur where the General Assembly will consider any amendments or vetoes
proposed by Governor Kaine.The
reconvened session is scheduled for April 4, 2007.Consequently, unless signed by Governor Kaine
with no changes, the budget bill as adopted by the 2007 General Assembly will
not become final until after the reconvened session has concluded and the
Governor signs the budget bill into law.If budget changes are made at the reconvened session
that affect school divisions, you will be notified in another
memorandum.

Questions regarding the amended 2006-2008 budget
adopted by the 2007 General Assembly and the revised projections of state
Direct Aid funding for fiscal years 2007 and 2008 may be directed to Kent
Dickey, assistant superintendent for finance, or budget office staff at (804)
225-2025.